Factors you never thought might affect your home insurance rate

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Marriage and home insurance… really?

Many things change when you get married. But what happens to the cost of insuring your home may surprise you.

It might not be the first thing that you associate with getting married, but research has shown that in general, getting married can result in reductions of up to 11% in insurance premiums, as well as other financial benefits. Similar to other insurance products and services, home insurance providers tend to price their premiums based on multiple factors such as your circumstances, profile, address, home type, and marital status. Married couples are typically seen as less risky by insurers, particularly when looking at people under thirty years old.

Home insurance in Dubai is no exception to this rule, but, if marriage is one step further than you are willing to take, there are other ways to save money on your home insurance premium.

Why is home insurance important?

In general, home insurance is divided into two distinct parts; the insurance of the building itself (fire hazards, water damages etc.), and the insurance of its contents (what you own and normally keep inside your house).

There are a lot of reasons why home insurance in Dubai is important, think of it like an umbrella that protects you from unknown risk.

When looking at the statistical data on claims against home insurance in the United Kingdom and the United States of America, the principal reasons for claims are, in order of proportional size: fire & lightning damage, bodily injury, property damage, water damage, wind, and hail.

Home insurance in dubai

Traditionally, the number of people who buy any kind of home insurance in the United Arab Emirates is quite low. In September 2018, Gulf News published an article stating that 69.1% of UAE Residents do not have home contents insurance.

No smoke without fire

There is a distinctly upward trend in the number of people choosing to purchase home insurance in Dubai. The reason why? Well unless you have been living under a rock for the last couple of years, it would have been impossible to miss the number of spectacular fires that struck several skyscrapers.

The General Command of the Civil Defense stated that 928 fires occurred in Dubai in the first half of 2017 alone; although that was 41% less than the year before, it is still a significant number. Residents in some areas can also testify that flood damages are not unheard of in this part of the world; yes, we have few rain episodes here, but our cities’ infrastructures and hour homes are not necessarily well prepared to such events.

The general trend identified by insurance companies and brokers in the country was that each of these incidents would be followed by an uptick in purchases of home insurance policies. An article in Arabian Business highlighted a 100% rise in home insurance sales since one particular fire at Dubai’s Zen Tower.

What type of coverage do you really need?

One of the first questions you have to ask yourself when considering home insurance, particularly contents insurance, is what liability coverage you require. For a  typical home in Dubai, there are a variety of considerations that are entirely dependent on your lifestyle and mode of living.

For example, a family with young children and a live-in maid or nanny living in a villa would have different requirements from a young bachelor living in an apartment. While both of these would require contents insurance for their belongings, the family might also wish to avail of additional cover for their nanny, to cover against risks that include medical, injury, sickness or even death and repatriation.

Expats living in Dubai often spend a lot of time out of the UAE. The amounts of time spent away from home should factor in your research since some insurance policies will not pay against claims if incidents occur while the house in question has been unoccupied for a certain period; this period can range from 30 to 120 days in some cases.

Rent vs. own

In most countries, buildings insurance is required by mortgage lenders as a matter of course, the reason for this is the security provided by the insurance for the risks against the structure.

When considering risks and the impact of negative eventualities occurring, it is highly likely that losing your home due to a risk that you could have insured against would affect your finances significantly more than it would affect a multinational bank, this is an important point to consider when you are thinking about ignoring this risk.

If you own your property, then it would be wise to have your own buildings insurance. Some of the considerations you might want to keep in mind:

  • Use an insurance comparison website in the UAE like Aqeed, it leverages the latest technology and a proprietary network of affiliates and trusted partners to get you the some of the best quotes in the market.
  • Calculate the estimated cost to rebuild your property, when you consider this you will arrive at a cost per square foot or cost per square meter.
  • What is the maximum amount you would be able to pay an excess for a claim?
  • Think about the mortgage outstanding on the property and factor that into your calculations. Remember of course that with ‘repayment’ mortgages your debt will diminish year on year, while with interest-only loans your debt will remain the same as you will only be servicing the interest.

The other type of home insurance in Dubai, contents insurance, should be taken advantage of by both tenants and homeowners.

Content insurance tips:
  • If you are obtaining buildings insurance, try using our website to compare policies that combine both buildings & contents insurance. Compare these to the cost of obtaining two individual policies.
  • Research what risks the contents insurance covers you against exactly, and in what circumstances this cover would be invalid.
  • Assess the value of all the belongings you have at your home.
  • The single claim limit you will likely require; most insurers stipulate it on a single claim and also provide for a cumulative limit for the term of the cover. Remember that you can only claim for items which you can prove you own. It would be highly advisable to have a folder, digital or physical, where you would store copies of receipts for any expensive belongings as and when you acquire them.

 

 

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Aqeed is an insurance technology company that aims to make insurance simple, transparent, and accessible. We are on a mission to help you become better at everything related to insurance. From the decisions you make to the choices you take, you are In Sure Hands.

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